Accumulate LT Foods; target of Rs 82: Geojit

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Geojit's research report on LT Foods

LT Foods (LTF) is a global consumer specialty company with focus on Basmati rice, Organic Foods and Rice based Convenience Products. LTF is having presents across 60+ countries with strong footprint in US, Europe and the Middle EAST. Q4FY22 revenue grew by 33%YoY. For FY22, revenue growth was at 16% YoY. Basmati & specialty rice segment grew by 9%, Organic foods by 19%, Health & Convenience segment by ~62% on YoY basis. Gross margins improved by 110bpsYoY to 33.0% due to improved product mix and higher realisation, while EBITDA margin declined by 40bps YoY to 10.0% due to higher freight cost and ad spends. LTF has recently acquired 51% stake in Golden Star Trading Inc. to strengthen market share in US Jasmine rice segment and the brand has ~10% share in US market. We expect earnings to grow at 24% CAGR over FY22-24E. LTF currently trades at 7x 1Yr Fwd PE. We value at 6x FY24E EPS (3Yr Avg=6x).

Outlook

We downgrade to Accumulate rating with a Target of Rs. 82 factoring current pressure on margins.

More Info

At 14:02 hrs LT Foods was quoting at Rs 69.15, down Rs 1.50, or 2.12 percent.

It has touched an intraday high of Rs 72.00 and an intraday low of Rs 68.65.

It was trading with volumes of 55,376 shares, compared to its thirty day average of 225,793 shares, a decrease of -75.47 percent.

In the previous trading session, the share closed up 4.51 percent or Rs 3.05 at Rs 70.65.

The share touched its 52-week high Rs 100.55 and 52-week low Rs 58.75 on 25 April, 2022 and 24 February, 2022, respectively.

Currently, it is trading 31.23 percent below its 52-week high and 17.7 percent above its 52-week low.

Market capitalisation stands at Rs 2,211.73 crore.

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